Main feature of Income Tax by the new Central Budget 2014-15

New Delhi, Jul 10: Finance Minister Arun Jaitley announced the first Union Budget of Narendra Modi government on Thursday. The Union Budget was similar to the Rail Budget passed by Railway Minister D V Sadananda Gowda, concentrating more on development and growth, avoiding populist measures taken by the previous governments. The Union Budget 2014 saw few changes in the tax exemption limits.

Following is the table indicating the impact of changes in income tax provisions proposed by Finance Minister Arun Jaitley in the Budget 2014-15. Tax exemption limit has been raised to Rs 2.5 lakh from Rs 2 lakh.

1) Here’s the tax slab for Individual Tax Payers:

Income Age (< 60 Years)	Tax Rate	Impact
Up to Rs 2,50,000	NIL	Rs. 5,000 (Savings)
Rs 2,50,001 to Rs 5,00,000	10 per cent	Rs. 5,000 (Savings)
Rs 5,00,001 to Rs 10,00,000	20 per cent	Rs. 5,000 (Savings)
Above 10,00,000	30 per cent	Rs. 5,000 (Savings)

Here’s the tax slab for Senior Citizens:

Income (For Senior Citizens)(>60 & < 80 Years)	Tax Rate	Impact
Up to Rs 3,00,000	NIL	Rs. 5,000 (Savings)
Rs 3,00,001 to Rs 5,00,000	10 per cent	Rs. 5,000 (Savings)
Rs 5,00,001 to Rs 10,00,000	20 per cent	Rs. 5,000 (Savings)
Above 10,00,000	30 per cent	Rs. 5,000 (Savings)

Tax Slab for an Individual (resident & above 80 years)

Income Slabs (> 80 Years)	Tax Rates
Total income up to Rs. 5 Lac	0% Tax
Total income above Rs. 5 Lac and below Rs.10 Lac	20% on Income exceeding Rs. 5 Lac
Total income more than Rs. 10 Lac	30% on Income exceeding Rs. 10 Lac + Rs. 1 Lac

2. Hike deduction limit under Section 80C of the Income Tax Act:

This section gives tax breaks to long-term financial savings instruments such as housing loan repayment, five-year and above tenure fixed deposits, provident funds (PFs) and life insurance policy premiums. According to Ambit, Mr Jaitley should incentive financial savings by expanding the current Section 80C limit from Rs. 1 lakh to Rs. 1.50 lakh. PwC has called for doubling of deduction under 80C to Rs. 2 lakh. An increase in 80C limits will increase domestic savings, which can be utilised for infrastructure development.

3. Increase in exemption limit for housing loan interest:

Currently, interest up to Rs. 1.50 lakh on home loan for self-occupied property is tax free. Analysts say the current ceiling should go up toRs. 4 lakh or Rs. 5 lakh to account for the sharp rise in property prices over the last ten years. Enhancing interest exemption limit will increase affordability and benefit the entire real estate sector, which contributes nearly 6 per cent to the GDP.

4) Kissan Vikas Patra (KVP) to be reintroduced in the Section 80C

5)Tax Rebate Rs.2,000/- U/s 87A  this section will be continued for the Financial Year 2014-15 also.

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